FNG ending North Slope LNG plans

Fairbanks Natural Gas LLC is abandoning its plans to build a North Slope liquefied natural gas facility and is asking regulators to relieve it from pursuing the project.

Through its affiliate Polar LNG LLC, the Fairbanks local distribution company started pursuing a North Slope LNG facility several years ago to take advantage of a North Slope supply contract and provide an alternative to dwindling supplies in the Cook Inlet basin.

Following a supply crunch in late 2006, the Regulatory Commission of Alaska required the company to file bi-monthly reports on its efforts to secure an alternative supply. Having been put on the losing end of two major policy decisions related to the project, Fairbanks Natural Gas believes it should be relieved from the project and the reporting.

In December 2013, the RCA denied a Fairbanks Natural Gas request to expand its service area throughout the Fairbanks North Star Borough, giving the certification instead to a municipal startup called the Interior Alaska Natural Gas Utility. In January 2014, the Alaska Industrial Development and Export Authority chose MWH Americas Inc. as its private sector partner for a state-backed effort to build a North Slope LNG facility.

“In light of AIDEA’s decision, there seems little reason for FNG and Polar to continue development of what would be a private LNG plant competing with a state-subsidized plant. FNG believes that it is appropriate to abandon its North Slope LNG project,” Fairbanks Natural Gas attorney Mark Figura wrote to the RCA in a March 4 filing.

Given that the project is moving ahead, Fairbanks Natural Gas plans to ask regulators to relieve the company of any obligation to pursue the plant or continue progress reports.

—Eric Lidji